ThaiBev's profit up 28% to $311.9m

Despite sales declining across spirits and beer segments.

ThaiBev's 1QFY17 results were broadly within expectations amidst a weaker consumer environment and promotional activities were postponed due to the mourning period in Thailand, according to OCBC.

"Keep in mind that 4QCY16 is typically the peak season. Revenue was down 8% YoY to THB46.8b, forming 24% of FY17F estimate, as sales declined across the segments - Spirits (-11%), Beer (-4.6%), Non-alcoholic Beverages (NAB) (-1.3%) and Food (-1.0%)," it said.

Nonetheless, lower SG&A expenses, higher net profit of beer business and share of profit from associates helped PATMI increase 28% to THB7.7b to constitute 29% of full year estimate.

Here's more from OCBC:

For both the Spirits and Beer segments, trade activities did not resume right after the first 30 days suspension of entertainment activities but rather 100 days after 13 Oct 2016.

Thus 2QFY17 may still reflect some weakness. On the other hand, the NAB segment started their activities after the first 30 days. Given the total savings of ~THB600-700m from advertising and promotion (A&P) across all segments, promotions will now go on as initially planned, particularly as consumer sentiment returns. In addition, we understand that there has been no significant change to market share for both Spirits and Beer, while market share for NAB’s major brands (Oishi, Est, Crystal) generally improved.

Notably, Beer’s gross profit margin was at a high of 23% (vs. average of 18.8%-21% in the last two FY); it could be sustainable as itmaintains decent bottle return rates and lower raw material costs.

With regards to competition, management believes there has been minimal impact and will continue to work on initiatives to maintain its market share.

*Conversion THB1 to SGD0.041